Art & Finance Newsletter #32 - Lawyer Convinced Client to Sell Him a Brancusi
Bit off more than I could chew while in London and was not able to get the last edition out. Back in Shanghai and doing it now.
Onto the art market...
Lawyer Convinced Client to Sell Him a Brancusi
An 88-year-old New York collector is suing a Philadelphia lawyer for allegedly tricking him into selling a Constantin Brancusi bronze for just $100,000, far less than what he claims it is worth. Stuart Pivar alleges that the lawyer, John McFadden, said he would help sell the work to the Philadelphia Museum of Art or to Christie’s auction house, but instead cheated him, essentially stealing the prized sculpture.
Pivar, who is representing himself, is seeking $200 million in damages, as first reported in the New York Post. The complaint does not give a dollar value for the work. Titled Mademoiselle Pogani II, the sculpture comes from the estate of Constantin Antonovici, Brancusi’s assistant, who made his bronze casts from 1947 to ’51. Casts of the same work also belong to the Yale University Art Gallery in Connecticut and the Albright-Knox Art Gallery in Buffalo, New York.
The complaint alleges that McFadden approached Pivar with a plan to sell the Brancusi under his own name. McFadden claimed that to do so would be advantageous to both men, although his reasoning isn’t exactly clear. “It was part of the overall plan he had proposed when he became my attorney,” said Pivar. “I really never gave it that much thought.”
To put the scheme in motion, according to Pivar, McFadden picked up the sculpture from the collector’s West Side apartment, ostensibly to bring it to the museum for the final sale. Photographs filed to the court show McFadden leaving with the 50-odd-pound artwork, cradling it in his arms. “We suggested that we use a regular transporter to bring the thing to Philadelphia, but he didn’t want to do it that way,” Pivar recalled.
The complaint accuses McFadden of “theft by deception,” arguing that his intent was always “to obtain ownership of the statue itself by deceit, misrepresentation, and subterfuge.”
Pivar does not have a copy of the bill of sale transferring ownership of the sculpture to McFadden, and says he only sued as a last resort. “He was my attorney and he said ‘sign here,'” he said. “And what do you do when your attorney says ‘sign here’?”
Artnet - Lawyer Convinced Client to Sell Him a Brancusi
Sotheby's Investors Sue to Block Sale
Two Sotheby’s shareholders are asking a New York judge to block the planned $2.7 billion purchase of the auction house by French telecom titan and art collector Patrick Drahi’s BidFair USA.
The investors filed lawsuits this week in federal court in Manhattan claiming incomplete and misleading disclosures about the deal. They’re seeking to block the companies from going forward with the transaction at least until there are further disclosures, and they’ve asked for unspecified damages.
On June 16, Drahi agreed to buy the 275-year-old firm, ending Sotheby’s three decades as a public company. Under the deal, investors will receive $57 in cash per share, a 61% premium to the closing price on June 14. Sotheby’s, one of the world’s biggest auction houses dealing in fine art, collectibles and real estate, has an enterprise value of about $3.7 billion.
The company said the deal is proceeding as planned.
Bloomberg - Sotheby's Investors Sue to Block Sale
LACMA Donor is Charged With Money Laundering in Malaysia
The art patron Riza Aziz, step-son of former Malaysian Prime Minister Najib Razak and a producer of the film The Wolf of Wall Street, has been charged with five counts of money laundering in Malaysia. The funds were allegedly misappropriated from the Malaysian government investment fund 1MDB as part of an embezzlement scandal that has ensnared numerous pricey works of art.
Last year, Riza’s production company, Red Granite Films, shelled out $60 million to the US Department of Justice to settle civil claims linked to the scandal. Riza was also a close friend of Low Taek Jho (aka Jho Low), the alleged mastermind of the fraud, who’s accused of using 1MDB funds to acquire expensive paintings, a superyacht, and real estate. Some of that property has been reclaimed by US authorities and money from ensuing sales has been returned to Malaysia.
In the past, Riza has been a generous patron of the Los Angeles County Museum of Art. In 2016, he doled out $1.1 million to the museum, on top of a previous $1 million pledge. The museum did not immediately respond to a request for comment.
Three years ago, the Justice Department released detailed documents showing how hundreds of millions of dollars were inappropriately transferred from the 1MDB fund to Low’s personal accounts or unrelated business entities and, in some cases, used to pay for tens of millions of dollars worth of art. The documents named three works in particular, a Vincent Van Gogh drawing and two Claude Monet paintings, that the government sought to seize.
Artnet - LACMA Donor is Charged
By now you've probably seen the situation in Hong Kong sustain and as of last night Hong Kong time, take an unfortunate downward turn.
I'll keep personal opinion on the matter out of the newsletter. But I will say this; expect to see a more and more clients look to Singapore as a location for their activities. Multiple folks in Singapore, Hong Kong and Shanghai have been speaking on this for some time now and it only appears to be increasing.
Speak soon,
Blake